Canada: Large Construction Projects – PLA Or Non-PLA... That Is The Question

Last Updated: February 10 2015
Article by Gabriel M. Somjen

Most Read Contributor in Canada, September 2016

Unique labour relations issues often arise in connection with large scale construction projects. One way in which these challenges can be addressed is through the use of a Project Labour Agreement (or "PLA"). PLA's can be used to address labour issues, establish cost standards and keep construction contracts on track by avoiding costly work stoppages. Recently, we have seen an increased interest in the use of PLA's, particularly in construction in British Columbia's liquid natural gas industry.

Generally speaking, a PLA is an agreement between the owner/developer (or a subsidiary or group of contractors) of a specific construction project and the various trade unions that will perform that construction work. The PLA typically governs all of the working conditions for a specific construction project. In most cases, the terms of the PLA will apply to all contractors and subcontractors working on the project (regardless of whether or not they are union or non-union), and the PLA will supersede any existing collective agreements or terms and conditions of employment which otherwise exist. In this way, the PLA creates a "level playing field" between union and non-union contractors. For example, wages and benefits are generally the same for all contractors working under a PLA, regardless of what union relationships or employment conditions would apply to that contractor outside the project. Often, workers are obtained through union hiring halls or a combination of hiring halls and outside hires.

A PLA typically includes provisions prohibiting any strikes, lockouts, or other work stoppages for the length of the project. By incorporating such terms, a PLA can provide labour stability for the duration of the particular construction project. However, that stability often comes at an increased cost, as working conditions and wage rates tend to be the same for all employees working on the project and therefore contractors must include those costs in their bids.

Because the terms of the PLA are project specific, it was generally thought that non-union contractors working under a PLA could not be certified in respect of work being done outside of the project. A recent decision of the B.C. Labour Relations Board appears to confirm that view. The issue was considered in the recent decision of the Kitimat Modernization Employer Association -and- Sarens Canada Inc. -and- DL Baker Construction Canada ULC -and- International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local No. 97. 1 That case involved a PLA which governed the project to modernize an aluminum smelter located in Kitimat, B.C.

One of the unions representing ironworkers on the project under the PLA brought an application to certify two subcontractors working on the project. The union's application was not limited to employees working on the project, but rather, the union applied to represent all of the subcontractors' employees within the province of British Columbia.

The Board found the unit being applied for was not appropriate. In reaching this conclusion, the Board found that the PLA established a single multi-employer, multi-union unit which covered all employees working on the project. The Board concluded that it would not be appropriate to carve out a smaller bargaining unit from the unit established under the PLA. That decision was upheld by the Board on reconsideration. The union has applied for judicial review of this decision however, the matter has not yet been set for hearing. BLG represented one of the subcontractors before the Labour Relations Board and will be representing that subcontractor in defending the application for judicial review.

This case highlights two important considerations: Owners and contractors involved in these types of large projects should carefully consider the pros and cons of using a PLA model versus traditional construction labour relation structures. Many factors will need consideration in making that important decision. If a PLA model is chosen, the terms of the PLA and related organization and documents must be carefully crafted in order to minimize the risk of labour relations complications and litigation.


1. BCLRB No. B111/2014.

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